Prediction market tax guide · 2026
Kalshi Taxes: Forms, Losses & How to Report Event Contracts
Quick answer: profits from Kalshi event contracts are taxable income, and your tax documents are posted in your account each January. Because Kalshi is a CFTC-regulated exchange, its reporting looks more like a brokerage form than a casino W-2G — which changes how your losses can be used.
Trading income or gambling winnings?
This is the question that decides everything else. Kalshi contracts trade on a designated contract market regulated by the CFTC, so many tax professionals treat closed positions as trading results rather than wagers. A sportsbook bet, by contrast, is gambling: winnings are reported in full and losses are deductible only if you itemize, capped at winnings.
The treatment is fact-specific and is still developing for prediction markets. Do not pick the answer that produces the smaller bill — pick the one your tax professional can support, and keep records detailed enough to file either way.
Which form should you expect
| Platform | Typical reporting | Where to find it |
|---|---|---|
| Kalshi | Annual tax document for qualifying traders (brokerage-style, not W-2G) | Account → Documents / Tax, typically posted in January |
| Robinhood prediction markets | Included with the broker's consolidated year-end tax package | Account → Tax center |
| Polymarket | May issue no US information return; you still report taxable income | Export your own trade and wallet history |
| Regulated sportsbook | W-2G at $600+ on 300:1 odds; 1099-MISC for promos and DFS | Account → Tax documents |
Never wait for a form to decide whether income is reportable. A missing document changes the paperwork, not the tax.
What reporting usually applies, scenario by scenario
| Scenario | Form you may receive | What you generally report |
|---|---|---|
| Kalshi contracts closed at an overall profit, treated as trading | Brokerage-style year-end tax document | Net result after fees, on the schedule your tax professional selects |
| Kalshi activity treated as gambling | Often no W-2G | Gross winnings as income; losses only if you itemize, capped at winnings |
| Small annual profit below platform reporting thresholds | Possibly none | Still reportable — use your own trade export |
| Overall losing year | Document may still be issued | Report per the applicable treatment; keep the export even if nothing is owed |
| Referral bonuses, promos, or platform rewards | 1099-MISC at $600+ per year | Other income, separate from contract results |
| Offshore or crypto-settled market (e.g. Polymarket) | Usually no US information return | Self-reported; crypto conversions can trigger separate reporting |
| Sportsbook bet alongside prediction markets | W-2G at $600+ on 300:1 odds | Gambling rules apply to that activity — keep it in a separate ledger |
Thresholds and platform practices change, and prediction market treatment is still developing. Use this as an orientation table, then confirm your facts with a tax professional.
How to report a year of Kalshi activity
- 1Export your full trade history and settlement history for the calendar year before January access changes.
- 2Match each closed position: market, contract, entry cost, settlement value, fees, and settlement date.
- 3Total your fees separately — trading fees generally reduce your net result, unlike a losing sportsbook bet.
- 4Reconcile the platform total against your bank and wallet deposits and withdrawals.
- 5Compare your total to the platform's year-end tax document and investigate any difference before filing.
- 6Bring both the trading view and the gambling view of the numbers to your tax professional.
Why netting matters more here than on a sportsbook
If prediction market results are treated as gambling, you report gross winnings as income and deduct losses separately — and only if you itemize. A trader with $40,000 of winning contracts and $38,000 of losing ones can end up taxed on a number far larger than the $2,000 actually earned. If the results are trading income instead, the netting happens before the number reaches your return. Either outcome depends on having a position-by-position record.
What belongs in your tax file
Free prediction-market ledger template (PDF)
A four-page print-and-fill reporting sheet built for Kalshi, Robinhood prediction markets and Polymarket: a position log with date entered, settlement date, stake, proceeds, fees and result, a filled example, and a year-end summary that produces the figures your preparer needs under either treatment.
Interactive year-end checklist
Work through these steps in order between December and the filing deadline. Tick each one off as you go — your progress stays on this device.
0 of 12 steps complete
Your progress is saved on this device.
Frequently asked questions
Does Kalshi send a 1099?
Prediction market platforms generally issue an annual information return to traders who meet reporting thresholds. Kalshi is a CFTC-regulated exchange, so its reporting is closer to a brokerage-style form than to a casino W-2G. Check your account's tax documents section each January and confirm the exact form you received before filing.
Are Kalshi winnings taxed as gambling income?
Not necessarily. Kalshi contracts are regulated event contracts traded on a designated contract market, so many tax professionals treat the results as trading income rather than gambling winnings. The distinction matters because gambling losses are limited to winnings while trading losses follow different rules. Confirm the treatment with a tax professional.
Can I deduct Kalshi losses?
Losses are only usable if you report them correctly under the treatment that applies to your account. If your contracts are treated as gambling, losses are deductible only when you itemize and only up to winnings. If they are treated as trading, different netting and loss rules apply. Either way, you need a contemporaneous record of every position.
What about Polymarket and Robinhood prediction markets?
The same questions apply: which entity paid you, what form it issued, and whether the activity is treated as trading or gambling. Platforms outside the US reporting system may issue no form at all, which does not remove the obligation to report taxable income.
Keep a record that survives either treatment
NetBetTracker logs each position with its date, stake, settlement, and fees, so you can produce a gross-winnings figure, a netted figure, and a session log from the same ledger.
Start a 7-day free trialThis guide is educational and is not tax or legal advice. Tax treatment of prediction market contracts is fact-specific and evolving; consult a qualified tax professional about your situation.